The Jharkhand government said on Monday that it can spare just over half of the total two billion tonnes of iron ore reserves in the Chiria mines for the 130-year-old Indian Iron & Steel Co. Ltd (Iisco), now part of the Steel Authority of India Ltd (SAIL), which owns a majority of leases to these mines.
The issue of ore will form the core of talks when Jharkhand chief minister Madhu Koda meets steel minister Ram Vilas Paswan in the first week of July; the controversy has erupted into a courtroom battle and is being monitored by the Prime Minister’s Office (PMO) for a possible out-of-court settlement.
Jharkhand’s revelation that it can only offer 1.3 billion tonnes is the second blow in as many days to SAIL, which saw protests this past weekend over land compensation for a new steel plant planned in Burnpur, West Bengal. According to SAIL, work at the existing Iisco plant in Burnpur had not been disturbed and the plant functioned as per schedule on Monday.
Iisco owns at least 10 iron ore mining leases with a total reserve of 2,244.59 million tonnes (mt), which were all transferred to SAIL after it took over the firm in February 2006.
But renewal of nearly seven of these leases, spread across Jhillingburu, Gua and Budhaguru in the state’s southern side, have been cancelled by the Jharkhand government on the grounds of resource exploitation.
In comparison, SAIL originally owned three mining leases with a reserve of 300mt in the Kiriburu and Mudharuburu areas.
Jharkhand has 3.7 billion tonnes of reserves, of which SAIL and Iisco together control more than 2.4 billion tonnes of iron ore spread across 4,900 hectares. Now, the state government wants at least half of this back to distribute to other steel investors, including ArcelorMittal, the world’s biggest steel company.
While SAIL is not ready to lower its demands, the state government said the country’s biggest steel producer’s projected needs for the next 50 years are too high.
Last year, the company made announcements to set up a 12mt plant in Jharkhand. It plans to overhaul the Burnpur plant by adding a new blast furnace, two sinter plants and a coke oven battery to take the current 0.5mt production to 2.5mt by 2010. This, according to a SAIL official who did not want to be identified, forms part of the company’s overall plan to produce 24mt of saleable steel by 2010.